No crying over spilt milk

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Let’s cut the hyperbole and get on with it. The American nation has voted for Donald Trump and his party. On one hand, this outcome has given a boost to the school of democratic scepticism. Democracy’s (rather weak) claim as “the worst form of government, except for all the others” has further suffered a blow. On the other hand, the realist school of politics would concern itself with questions of limited dimensions: what does this outcome mean for the world? What are risks and opportunities that arise from this event? Following the realist school, this article analyses the possible impact of a Trump Presidency on India. First, a look at the underlying factors that are likely to drive the new administration’s policies. One, domestic issues related to economic growth, jobs, inequality, and social service delivery will continue to be the priority areas on the governmental agenda.

Two, India is unlikely to be amongst the top five foreign policy priorities of the US. This is because the US government tends to concentrate its energies on geopolitical actors that directly threaten US interests or those that mitigate such threat, and India doesn’t fall in any of these categories. The two factors listed above weren’t strictly determined by this electoral outcome. But a third factor that has come into play this time specifically is that the US is likely to become more inward-looking. The narrative in the US has reached a new equilibrium, characterised by anti-establishment, anti-globalisation, anti-immigration, pro-nation state, and pro-identity values. These three factors will have an impact on policy decisions in the domestic and foreign affairs spheres alike. One domestic issue that will have direct implications for India will be the next administration’s immigration policy. Trump has repeatedly spoken about a tough immigration policy by calling for a hike in the minimum wage paid to H1B visa holders.

This will impact Indian students and workers in the US. At a macro level, a tougher immigration will have an impact on the Indian economy as well. Remittances constituted 3.4 per cent of India’s GDP in 2015, $11.5billion of which came from the US alone. The opportunity here lies for the smaller Indian software companies which might see higher quality work being offshored to them. In terms of foreign policy, an inward-looking attitude means that the US will reconsider its engagements with other countries across the globe. Questions such as “Why are we in West Asia? Why are we in Afghanistan? Of what use is the alliance of Japan and South Korea to the US?” are now back on the decision agenda. In fact, the long-established American foreign policy goal of preventing regional hegemony has itself come under the scanner. This attitude will have two short-term consequences for India. One, the US presence in the Indian Ocean has been responsible for the provision of the common good called regional security.

The US Navy has been the largest contributor of ships in the Indian Ocean region since the troubled days of piracy began in 2010. Should the US reduce its presence on account of its inward-looking policy, India and other states in the region will have to step up their game substantially. Hence, it will be critical for India to work on enhancing its naval capabilities in the Indian Ocean. The second short-term consequence will be felt in Afghanistan. Over the last one year, both these powerful regional actors, have, perhaps for the first time, landed on the same page with regards to Afghanistan. But the new administration might water down its presence further, making the beleaguered State of Afghanistan even more susceptible to a Taliban takeover, backed by Pakistan. In such a scenario, India will have to shoulder more responsibilities in Afghanistan on its own, a situation that will demand substantial material and human costs.

The third short-term consequence will be in terms of American policy towards Pakistan. Previous administrations have been unable to take tough steps against Pakistan, falling for Pakistan’s now-perfected art of rent-seeking. Despite Pakistan’s sponsorship of terrorists groups such as Lashkar-e- Taiba (LeT) and the Haqqani Network, the US continued to remain Pakistan’s largest export market and a significant contributor of economic and military aid. Under a Trump administration however, this policy is expected to undergo a significant change for the better. A long term consequence for India will depend on how the new administration in the US views China’s role globally. As the US looks to reduce its own presence in Asia, it will have to rely on stronger partnerships, and one such important partner will be India.

This will give India a tremendous opportunity to increase its own power projection capabilities. One can also expect that the post-world war era multilateral institutions such as World Trade Organisation (WTO) will suffer a decline in credibility. Hitherto, these institutions benefited immensely from American support. But with Trump himself taking a stance against globalisation and free trade, the underlying principles of these institutions will get eroded. While this will lead to global uncertainty in the short term, it provides a new opportunity for India — the old order is weakening and India can play a bigger role in a new order that recognises India as a major global player. Finally, The Economist Intelligence Unit had categorised a Trump presidency as a global risk of the same level as “the rising threat of jihadi terrorism destabilising the global economy”. Given that this risk has now become a reality, India is left with no other options but to manage the consequences and look out for potential opportunities.

Pranay Kotasthane is a research fellow at The Takshashila Institution
He tweets @pranaykotas